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2016 (5) TMI 811 - AT - Income TaxDisallowance of salary expenses - the assessee Society was granted registration u/s 12AA - Held that:- CIT(A) was full y justified in admitting the additional evidence. We may also observe here that Assessing officer has disallowed 50% of the salary expenses on adhoc basis without pointing out any particular instance to show that the part of payment was bogus. Thus, we full y agree with this observation of the C IT(A) that there was no basis for making disallowance of 50% of salary expenses. As regards the disallowance out of salary expenses at ₹ 5 lakhs sustained by the C IT(A), we are of the view, that disallowance of ₹ 5 lakhs is quite reasonable and justified keeping in view the facts and circumstances of the present case. Accordingly, we decline to interfere with the order of the CIT(A) on this issue. Addition made on account of disallowance of expenses u/s 40(a)(ia) - Held that:- Provisions of section 40(a) are not applicable in case of charitable trust or institution where income and expenditure is computed in terms of section 11. Addition of unvouched expenses and expenses of personal nature - Held that:- C IT(A) has correctly observed that the expenses incurred on account of business promotion, Misc. expenses, repair and maintenance office expenses, D.G. set and Printing and stationery expenses are required for smooth running of the educational institution. By any stretch of imagination, these expenses cannot be held unreasonable or excessive. We also agree with the CIT(A) that 1/10 t h of vehicle running and maintenance expenses is to be treated as personal in nature because the element of personal use of vehicle cannot be ruled out in this case. There is no evidence on record to show that the assessee had maintained the log book of the vehicle. Thus, considering the entire facts and circumstances of the case, we uphold the order of CIT(A) Withdrawal of registration u/s 12AA - Held that:- CIT(A) has deleted various additions made by the Assessing officer and after re-computation condition of application of 85% of income stands satisfied and, therefore, there remains no ground for withdrawal of the registration granted u/s 12AA of the Act. According to Ld. Counsel for the assessee, this ground has been raised by the Revenue considering the additions made by the Assessing officer. In our opinion, the order of the CIT(A) is correct and the ground raised by the Revenue that the trust has applied 62.32 % of its income for the purposes of which trust had been created has no force - Decided against the revenue.
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